Slashdot videos: Now with more Slashdot!

View

Discuss

Share

We've improved Slashdot's video section; now you can view our video interviews, product close-ups and site visits with all the usual Slashdot options to comment, share, etc. No more walled garden! It's a work in progress -- we hope you'll check it out (Learn more about the recent updates).

CSHARP123 writes "The Department of Justice launched an investigation into the 'No Poaching' agreement between Apple and Google in 2010, but details of the case were only made public for the first time yesterday. TechCrunch was the first to sift through the documents, and has uncovered some ostensibly incriminating evidence against not only Google and Apple, but Pixar, Lucasfilm, Adobe, Intel, and Intuit, as well. According to the filings from the U.S. District Court for the Northern District of California in San Jose, these companies did indeed enter 'no poach' agreements with each other, and agreed to refrain from soliciting employees. The documents also indicate they collectively sought to limit their employees' power to negotiate for higher salaries."

As my wise Republican candidates have pointed out, this kind of thing is proof that the free market--left to itself and without any government oversight, regulation, or interference--will make things better for all of us. The DoJ needs to get off the backs of these job-creating companies and let them give their employees the freedom that Jesus and Capitalism can only provide when we have a free market with no regulation or oversight. Anything less is socialism.

Your kidding me right? That is what the Republican Party has been screaming about the last 4 years. They want NO regulation on anything!

EPA, gone.

Minimum wage, get rid of it.

Oversight for Banking, no!

Those are just a few examples off the top of my head, I am sure that there are more. Take Ron Paul; he is in favor of getting rid of a few government agencies just for the sake of getting rid of something.

It might be fraud is all companies involved were boasting, in writing, about how open and competitive their hiring and pay practices were. But there's no indication that is the case.

And one man's collusion is another man's cost-reduction practice. Anti-trust is a regulatory check on capitalism because, in the short term, collusion and price fixing work. And in modern capitalism, there is no other term than "short term".

Have the republicans really pointed that out? I don't even think many libertarians think that way either. Readily available information is a vital part of a healthy free market, and these secret agreements violate that principle. This is the exactly the sort of thing that the government _should_ be doing in a free market economy: correcting the non ideal factors of real world competition. Things like limiting monopolies and ensuring availability of accurate information (e.g. in advertising) are some reg

This no poaching agreements could be supportive of Free Market principles. By preventing companies from directly advertising jobs to a specific potential employee they have to make the job posting public and consequently open to more potentially employees. So instead of Apple directly soliciting a top engineer from Google with Google possibly being unaware of it a particularly savvy Google could see that Apple is looking for a new top engineer and they would be able to notice that one of their employees is

The free market does not adjust itself overnight. But, had the DoJ not done anything, there is a good chance the situation would have changed in a few years. Why? Essentially, a certain group of X companies are colluding to keep employee salaries low. Say the market salary for an employee would be A, but it's reduced to D as a result of the collusion. This is an unstable situation for two reasons: first of all, it's possible that one of the X companies will start hiring employees for a slightly higher salar

Your argument supposes (wrongly) that other companies would not prefer to pay lower wages as well. Without regulation new companies will simply join the collusion against employees, and the overall average wage will remain depreciated indefinitely, they have no incentive to offer more money if they can simply join the scheme and pay less like everyone else. The net effect is to drive down the pay/productivity of employees, and thereby drive up profits.

This agreement appears to be a followup to the now defunct rules that were 'non compete' clauses (that were, but afaik not legal in California anymore*). Those had the same net effect - you couldn't change employers quickly and if you tried you'd be potentially out several months or years salary in doing so. Since non competes have been around as long as I've been in the IT business (which is getting on to 15 years now) this has, in various forms, been going on for a very long time, and the market doesn't seem to have corrected itself. Actually, it's exactly what I said, in that time new companies emerged, (say, google) and were folded into the grand scheme by the existing players (intel, adobe, Apple and so on). The details of the scheme changed, but it's the same scheme. Sure, they still drive up prices for employees competing for talent to some degree - but not as much as they would have without the protection for employers either from non compete contracts or from collusion.

A free market is free to have a massive coordinated effort by those with money to operate from an unfair position against those who don't have money. Preventing the unfair coordination is the point of (some) regulation.

*I don't live in the US, or California, and never have (or will). My recollection on the details of these rules is hazy as it won't ever directly effect me.

Most/all companies set salaries according to the "market median". They claim to have commissioned some survey org to go poll for salaries in the area and then set their salary bands accordingly. They don't attempt to retain talent but salary, but by inertia.

If I'm not likely to get lots more dough for moving someplace new, I probably won't. A new workplace means:- you need to integrate into a new environment, which might be worse than your current.- You definitely need to p

I would insert a parallel to Slavery from the past, but it'd probably get marked as a Troll or Flamebait... So... I'm just gonna call this "The new form of slavery"..

Hold on... You were going to insert a parallel to slavery, but instead you decided to call it "the new form of slavery"? Well I was going to reply to your comment, but instead I'm just gonna to write a reply.

From the article: "The evidence states that the defendants agreed not to poach employees from each other or give them offers if they voluntarily applied, and to notify the current employers of any employees trying to switch been."

while in the long run the increased regulations they can inflict will hit their real enemy - small corporations that haven't yet grown into viable threats.

Just stop... my brain cannot repel trolling of this magnitude...

You are right... us liberals are just using this perfect example of the perfect free market at work as an excuse to destroy through regulation those dastardly small business job creators, the final opponent in our grand diabolical scheme of one world government. Yes.... yes... it is all going according to plan!

Get a load of that coincidence. it 'coincides' just 2 days after sopa protests, and involves almost all major technology companies that have major stakes on internet. Just like how the megaupload bust 'coincided' a day after sopa protests, yesterday.

Get a load of that coincidence. it 'coincides' just 2 days after sopa protests, and involves almost all major technology companies that have major stakes on internet. Just like how the megaupload bust 'coincided' a day after sopa protests, yesterday.

It's funny that this drops the same day as the Fortune list of best companies to work for. I see many name here at the top of that list. Not quite sure what to think... I dislike secret corporate agreements, especially to keep salaries down, but I had a fellowship at Intel and found it to be a really good environment, and my colleagues thought so too. At the same time one couldn't help but to notice the incredible number of green badges (contractors) used while Intel posts record quarters. I suppose when you are as big as Intel, it's nearly impossible to be all good, or all evil.

Most B2B contracts I've seen, particularly ones involving services, have a "non-solicit" agreement where each party agrees not to hire the other's employees away for a set period of time. It's not uncommon and I'd be willing to wager that all of these companies have done business with one another in some way, shape or form.
Entering into this kind of an agreement without legitimate business that might expose the parties to one another's valuable human resources might be a problem. The part about collecti

The problem is trying to negotiate for a raise but what was happening in the 1970s - you work for company A for six months and company B comes along and offers you 25% more. Six months later, company C offers 20% more. Six months after that, company A offers the same person another 25% raise to come back. Yes, this gets out of hand quickly and is something that just about everyone - including the employees - hate. Sure, it is nice to be wanted but sooner or later it is going to catch up to you. It also

Poaching is completely legal in an employment sense. Google got to steal people from Microsoft to prevent them from developing a search engine earlier and while they got sued nothing really happened. I think Microsoft has done the same thing to Google as well. And I know Apple has been on both sides in the past.

There are no laws that say company B cannot directly contact company A's employees and offer them higher paying jobs. Of course, once you start down that road there are few limits as to what can

Union actions are public knowledge. Whatever benefits the union gains are slightly counterbalanced by businesses' responses and negative reactions from the public and politicians. Corporate agreements are not public. Someone looking to be hired by one of these companies cannot use it to their advantage in the decision-making process, and they avoid any public reaction.

If they want to make these "corporate unions" public they're welcome to have them, but the clandestine nature of the agreements makes it obvious that they already know that there'd be hell to pay.

That's a bald assertion there. By the very nature of a union, it must be public in order to gain members and perform actions like strikes. It's impossible to do that privately. Moreover it's against the (U.S) law to make a secret union. Now, from what reasoning could you possibly conclude they aren't public?

By the very nature of a union, it must be public in order to gain members and perform actions like strikes

Wow. You are either incredibly naive and ignorant of history (which includes time periods like earlier this morning), or you are a very, very bad union shill that should explore other work before they start the decade-long process of trying to fire you, if they can, or simply wack you, because that involves fewer hearings.

Unions are famous for being run be people who conduct back-room political deals. Negotiations over things like pay and contract terms are held behind closed doors. Turf agreements betw

Collusion among horizontal competitors (i.e. not up-and-down the supply chain, but across it with other companies on the same level of industry) is problematic (read: potentially illegal and contact a good antitrust lawyer) under the Sherman Anti-Trust Act.

The Act technically limits "restraint of trade," but that would, if read literally, prevent all commerce. Basically, Congress left it completely up to the courts to determine what anti-trust policy would be, by legislating very generically, in part b

"We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate [...] Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people". In contrast, when workers combine, "the masters [...] never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen."

Please mod parent up for this perfectly fitting Adam Smith quote... Perhaps one should post some juicy exercepts about his thoughts on why corporations are a perversion of the free market... Conservatives always seem to skip that chapter:)

"If they want to make these "corporate unions" public they're welcome to have them. "

No they aren't. It's called collusion. Unions do not form an effective monopoly but corporate competitors colluding DO form such a monopoly and the law must prevent this. Not only for the anti-competitive aspects but because it tosses the HUMANS right to pursue happiness out the window.

I agree with you, but let me play devils advocate... Are they really colluding as competitors though? They may or may not be actual competitors in SELLING their products and are not colluding on that front, however labor is something they are in BUYING competition on.

In other words, does collusion between corporations who are in BUYING competition with apply to current anti-trust laws?

If they want to make these "corporate unions" public they're welcome to have them,

Sure about that? I doubt corporations are allowed to collude like this, even if they make it public. Unions on the other hand are encouraged to do so.

Kind of like price fixing; corporations can't get together and decide how much to charge for their products, but workers are allowed to form unions and decide how much to charge for their product (labor).

The no-poach agreements reduce the stress on a company that has talent but, in the short term, isn't as desirable as somewhere else. In my opinion, the agreements shouldn't prevent Apple from hiring a Google employee (or even offering a great deal), but rather just from advertising jobs specifically to them because they're at Google. In the long term, employees who are dissatisfied enough will leave eventually. They know the jobs are out there.

No soliciting is one thing. And I don't really have a problem with that either.

But try working in an area where employers have a 'do not hire' policy. You quit one job and everyone else tells you they won't hire ex-employees of certain companies for a period of time. You might as well step out of the bushes and surrender when you hear the slave hunters' dogs approach.

Just like with unions, problems aren't a reason to reject the notion entirely. Regulate them, instead.

I'd like to see enforced regulation of no-poach agreements. Sure, you can prevent others from hiring people who quit your workplace - but you'll need to keep paying them after they leave, regardless of why they left. If your company's talent and secrets are worth enough that you'll screw up someone's career, they should be worth throwing a bit of money after.

Yes, it'll annoy the free-market crowd here, but I'm generally in favor of more regulation everywhere - as long as it's determined by competent regulators who understand the field they're working with.

To be perfectly honest, if I had to sit around for 10 years (properly funded, mind you, so I won't starve and can still function in the economy) I would have my own killer product and/or software at the end of that time in a totally unrelated field.

I certainly wouldn't mind someone paying me to stay at home for a year - right now I have a few feasible products that I could develop if I could just get the time...

Yep, I had to save up for a 6 month "vacation" when I last switched jobs in the SF Bay area. I had been working for one of the data center providers that serviced most of the companies in the region. Tied to their hosting contract, was a do not hire clause with a six month window, and I was told by HR that the only reason it wasn't "illegal" was because the agreement wasn't between the employee and company directly. It has been an open secret for some time that most of the major players also have these agreements in place. It is particularly frustrating, and effectively the same as a black list (which is illegal in CA), so I'm glad the practice is finally being investigated.

How do you define poaching. After all, regardless of who initiates the conversation it is always the corporation that extends the offer so you could say any hiring is poaching.

This kind of thing could make you unhirable to the best market for your skills. If you work for a vendor supporting their product that vendor will typically require a non-compete from you and a non-poaching agreement from all their partners... basically everyone who wants the skills you have. There will be a time limit on this, maybe 5 yrs but this is tech. 5yr old expertise is the same as not having any.

I'll define it by example, based on what I've seen firsthand: Initech was doing fairly well. Initrode wasn't doing so well, but had some new projects they were starting. Initrode sent letters to everybody they could contact as Initech, trying to recruit Initech's talent as their own. To me, that's the bad part of poaching, because it's clearly intended to specifically hurt competitors, and it cuts the public out of the chance to apply.

I personally haven't had much experience under non-compete contracts, but

How much worse does it have to get? Your agreement said that you couldn't perform the same job for six months after leaving. Working the same job when you switch from company to company is called a career. Fortunately that non-compete effectively prevents you from working in your chosen profession (software developer) and any non-compete that does so is null and void legally AFAIK.

BTW having now read TFA it clearly states that the anti-poaching agreements prevented the companies from hiring each others workers even if they voluntarily applied for the position.

"Initrode sent letters to everybody they could contact as Initech, trying to recruit Initech's talent as their own. To me, that's the bad part of poaching, because it's clearly intended to specifically hurt competitors, and it cuts the public out of the chance to apply."

I disagree. Competition is a good thing. When they are trying to recruit the talent from the other company they are also offering them a higher salary. This results in increasing average salaries in that profession. That is good for pretty much everyone. If Initech is paying their employees a generous wage and benefit package then Initrode won't have much luck.

The only reason for not wanting this is because companies don't want to have to offer and maintain generous wage and benefits packages. Companies want to cheat by hiring employees with less skill but raw potential at a low salary, encourage and sometimes even force those employees to develop their skills but keep them at a salary in the ballpark of their entry level skill set even though they now possess a skill set worth far more. Training in house is a valid strategy for having staff with a known skill set and competency and for minimizing the cost of those who don't work out. It isn't a valid strategy for avoiding paying competitive wages for their talent after it is developed.

In general, employers, especially ones where unions are present, are a relatively small number of groups that wield a lot of organized power.

Conversely, unions, ostensibly*, represent the employees and potential employees, a group which usually has more total power than the employers, but lacks the organization to wield it effectively, often wielding it only to the extant that the weakest and most desperate individuals in the group are willing to wield it. Why? because the employers will take those first, as they are cheaper, and this makes those that were trying to get fair compensation, instead of just any compensation become the weaker and desperate*. Unions can balance the ability to wield power so that the employers are move likely to provide fair compensation. Large employers typically don't need this assistance.

* There are quite a few unions I've seen that seem to only absorb chunks their member's paychecks without actually providing any benefit in bargaining with the employer, effectively acting as a lamprey on capitalism. These days I'm not sure if this is the exception or the rule... At one time, it was the exception.** there are exceptions to this rule, however, as this is the most profitable way to run a business (get the cheapest labor that will give you the desired quality), this tends to be the trend, and companies not following it will be less profitable, and therefore grow less than companies that do.

Yeah, and while the people are waiting for this eventual collapse, what then? Oh, right, they're just screwed. What a great solution. Saying to let the market decide ignores the fact that these things take time and people get screwed during that time. Yeah, maybe it will EVENTUALLY sort itself out, but in the mean time, we have to put up with something like this and that is bullshit. Laissez-faire was proven pretty early on to be a completely useless government policy and yet people still trot that out like it's some new insight; it is not unlike like trickle down economics. It doesn't work, we know it doesn't work, and yet people still bring it up as a valid argument.

Yes, that is also a perfectly reasonable solution. It's really easy to just real quick quit and start a new company. You make this sound like you can set it up in a fucking weekend. Are you serious? It turns out that taking your ball and going home is not always a particularly great solution. Not everyone has the time, ambition, or knowledge to start their own company. The fact that you can't start your own company does not mean that the people you are working for should be able to screw you over. That's absurd.

Seriously, when have free markets ever resulted in anything other than a monopoly within a very few years of the foundation of a very wealthy competitor in the market? I can't think of a single instance where a free market ever led to an improvement for either customers or competitors over the long term. Short term, sure, but as soon as someone with enough money to manipulate that particular market sector notices the opportunity you may as well sell your shop and invest the proceeds in the up-and-coming monopolist.

So what? Cartels will naturally fall apart given no government interference. It is in their best interests to cheat on this agreement. Its just like the prisoner's dilemma, while it might be best for all of them to cooperate, they won't because they want an advantage over their competitors. Cartels never last so long as there is a lack of government involvement.

[Citation Needed]

Ludwig Von Mises and his ilk (which while they had good ideas they don't really apply to real world human behaviors).

Critics of laws against predatory pricing may support their case empirically by arguing that there has been no instance where such a practice has actually led to a monopoly. Conversely, they argue that there is much evidence that predatory pricing has failed miserably. For example, Herbert Dow not only found a cheaper way to produce bromine but also defeated a predatory pricing attempt by the government-supported German cartel Bromkonvention, who objected to his selling in Germany at a lower price. Bromkonvention retaliated by flooding the US market with below-cost bromine, at an even lower price than Dow's. But Dow simply instructed his agents to buy up at the very low price, then sell it back in Germany at a profit but still lower than Bromkonvention's price. In the end, the cartel could not keep up selling below cost, and had to give in. This is used as evidence that the free market is a better way to stop predatory pricing than regulations such as anti-trust laws.

There are two unusual reasons that worked out in Dow's favor: 1) He was in a different country where he could start his company without interference from the German cartel; and 2) The German government neglected the important step of adding tariffs to his imported bromine.

The reason anti-trust laws are so important is because these circumstances are rare. If Dow had lived in Germany at the time, they would have taken an immediate interest in his start-up and likely either stolen his process or squashed his company before he became a threat. This is precisely what is happening in the U.S. with the entertainment industry: government-supported cartels are forcing all the (media distribution) innovation overseas, and now they want SOPA to quash even that.

This is used as evidence that the free market is a better way to stop predatory pricing than regulations such as anti-trust laws.

These examples only hold up perfectly in the case where there are zero barriers to entry. That situation only exists in laboratory economics. In real-world economics, there are barriers to entry that vary from limited (as in the case of unregulated commodities, like bromine, where the only barrier is setting up the warehousing and distribution) to extreme (as in, for example, phar

I've never notice that real world observations had much influence on either economists or libertarians. Just look at the IMF/World Bank's prescriptions for economic recovery to every single client state. They've been using the very same recipe for half a century in spite of the fact that it has never worked even once, and in the vast majority of cases has worsened the client's situation. Of course you could be cynical and say that was the actual desired

A cartel is simply a prisoner's dilemma, something that has been studied for years. While it benefits all companies in the cartel to stay with the cartel, if one person breaks the cartel, the rest of the companies are in worse off shape (investors will go for the company that broke the cartel and has higher profits). So the diagram goes something like this

If they sign an agreement, though, they can introduce financial penalties to case 2 and 3 that reverse the outcomes.

Except that if the penalties are too steep, than neither can get out of it when a 3rd player comes in and takes advantage of not being limited by it. One of the companies will benefit from being in the agreement longer than the other, and may very well refuse to let the other out of it.

All they need is an out clause that let's them end the contract. There's no downside, they both want to be able to get out in the event of just such an eventuality. They just want to know when it happens.

It's not a prisoner's dilemma as the parties are in regular contact and in the prisoner's dilemma a large part of it is that there is no communication between the parties. A cartel is always going to be better for the individuals than going alone, that's why they form cartels and why antitrust regulations seek to prevent it. OPEC itself has had no problems existing for decades.

The reason why diamonds are so expensive isn't the result of De Beers, but rather the governments of the western world refusing to sell diamonds unless they are certified as "conflict free" and the government of many diamond producing nations having laws in place to limit the harvesting and exporting of diamonds.

Most of the evil that De Beers does isn't done by De Beers but rather by willing governments. Take the government out of the equation and corporations become

Governor Rick Perry of Teax in announced plans including tanks and warplanes to protect the USA from Los Zetas if the Mexican government collapsed. Los Zetas was formed in 1999 and is getting bigger. so they are having growth problems....what was your point?

The reason why diamonds are so expensive isn't the result of De Beers, but rather the governments of the western world refusing to sell diamonds unless they are certified as "conflict free" and the government of many diamond producing nations having laws in place to limit the harvesting and exporting of diamonds.

... because De Beers has influence over these governments to maintain the market conditions that De Beers wants. The problem with free market puritanism is that it attempts to completely separate the private entity with the government entities they manipulate. Some would even go so far as to try to victimize De Beers. The fact remains that De Beers is just as complicit in all the bloodshed in those regions. Playing the "only blame the governments involved" is shortsighted.

The reason why diamonds are so expensive isn't the result of De Beers, but rather the governments of the western world refusing to sell diamonds unless they are certified as "conflict free"

You're joking, right? The cost of compliance with the Kimberley Process [wikipedia.org] is insignificant compared to the cost of the diamonds involved. Here is what the regulation requires: each shipment of diamonds must be sealed and accompanied by a Kimberley Process Certificate. That's it. The charge for package sealing and certificate is low - e.g. UAE charges about $90 US [digitalflip.com]. That is $90 for a single certificate that accompanies a package of diamonds worth hundreds of thousands (or even millions) of US dollars. It's insi

That was my thought, that whole situation didn't arise until the late '90s, prior to that there was no particular stigma attached to buying such diamonds as most people were unaware of the consequences.

DeBeers itself already had a monopoly in the diamond market and they were the ones that were convincing people to buy diamonds for engagement rings, prior to that it wasn't a common practice at all.

It's because nobody in their right mind would go after someone from Microsoft, and everyone who does have talent knows that going to work for Microsoft is a career-ender. It kind of makes them irrelevant to the issue.

Microsoft has a long history of poaching employees. They did it from Borland, Apple, and I'm sure Google as well (Of course many employees also left MS to go to Google. The infamous "chair throwing" incident was because an employee went to google).

Microsoft probably just recognized such an agreement as anti-competitive, or they weren't asked because the others felt adding a monopoly would be unwise. Or maybe MS just wanted to poach people.